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The final report of the congressionally chartered Commission on Wartime Contracting in Iraq and Afghanistan says at least $31 billion has been lost to contract waste and fraud, and that major reforms are required.

Commission reform objectives include improving federal planning for use of contracts, strengthening contract management and oversight, expanding competition, improving interagency coordination, and modifying or cancelling U.S.-funded projects that host nations cannot sustain. The reforms are described in 15 strategic recommendations.

The eight-member, bipartisan Commission filed its 240-page final report, “Transforming Wartime Contracting: Controlling Costs, Reducing Risks,” with U.S. Senate and House officials this morning. A briefing in the Capitol followed.

The Commission report notes that a consequence of 1990s reductions in the federal acquisition workforce and in support units within the military, the United States cannot conduct large or sustained contingency operations without heavy support from contractors. “Contingency” operations, as defined in federal law for the Department of Defense, are those involving military forces in actual or imminent hostilities, or in response to declared national emergencies. Civilian agencies use a similar definition.

Commission Co-Chair Michael Thibault, former deputy director of the Defense Contract Audit Agency, said, “The government has known for 20 years that contractors would be a key part of any major response to large or sustained hostilities or major disasters. Yet the government was not prepared to go into Afghanistan in 2001 or Iraq in 2003 using large numbers of contractors, and is still unable to provide effective management and oversight of contract spending that will have exceeded $206 billion by the end of September. That has to change.”

Co-Chair Christopher Shays, a former U.S. Representative for Connecticut, said, “The Commission finds the government is over-relying on contractors. Even if you think having more than 260,000 contractor employees at work in Iraq and Afghanistan, at times outnumbering the military they support, is reasonable, there are still problems. Some contractors have been performing tasks that only federal employees should perform, while others are doing work that is permissible but still too risky or inappropriate for contractors. And overall, there is simply too much contracting for the federal contract-management and oversight workforce to handle. From every angle, that’s over-reliance.”

The co-chairs said fraud and abuse are problems in wartime contracting, but the biggest challenge is waste. Thibault said, “We have founds billions of dollars of waste stemming from a variety of shortcomings—poor decision making, vague contract requirements, lack of adequately trained federal oversight people in the field, duplicative or unnecessary work, failure to revise or recompete contracts, unsustainable projects, inadequate business processes among contractors, and delayed audits. There are many causes, and no simple solution.”